China is the global number one trading partner, surpassing United States
Author: CSEBA / SEEbiz / Tanjug
23rd April 2023
BELGRADE - Ivan Vujačić, professor at the Faculty of Economics and Political Science in Belgrade, said that China is now the number one trading partner in the world, which was once America, and emphasized that the economic relationship between the two countries is one of the most important.

At the online conference "American politics and economics: a view from Serbia", Vujacic pointed out that, however, relations between Beijing and Washington have become more complex and strained in recent years.

At the panel "America in contemporary international economic relations", he pointed out that in America the number of people employed in industry has fallen to 10 percent, for which the Americans blame China and therefore impose restrictions on it. Vujacic, however, believes that automation and new software are more to blame for this than China.

He reminded that since 2018, America and China have been involved in a trade war, with both countries imposing tariffs on each other's edge. America accuses China of unfair trade practices, including intellectual property theft and forced technology transfers, while China accuses America of trying to limit its growth as a global economic power.

In addition to the trade war, the US and China have a number of other economic disputes - for example, the US accuses China of manipulating the value of its currency, the yuan, in order to gain an advantage in international trade. America is also concerned about China's growing influence in key industries such as telecommunications and high-tech manufacturing.

Jelena Žarković, a professor at the Faculty of Economics in Belgrade, explained that, despite these challenges, the USA and China continued to maintain economic relations. In November 2020, the two countries signed a first-phase trade agreement, in which China committed to buy additional goods and services from the US and to make structural changes in its economic policy.

However, many fundamental issues in US-China relations remain unresolved, but tensions between the two countries are likely to persist for the foreseeable future. The speakers agreed that the trade war has had a significant impact on the global economy, including falling stock prices and increasing uncertainty in international trade, but many companies involved in trade between the US and China have also struggled.

In November 2020, the two countries signed a phased agreement called "Phase One" on trade that reduced tensions and provided relief to the global economy. "Buy American," although the policy was first introduced in the 1930s, now occupies a prominent place in American trade policy. The practice of cutting off foreign supplies originated during the Great Depression, but panelists agree that these laws are often counterproductive because they are costly to taxpayers, reduce exports and lose more jobs than they create.

U.S. procurement laws typically impose heavy penalties on the purchase of foreign materials or the participation of foreign companies in federal procurement, but the American Recovery and Reinvestment Act of 2009 (the Stimulus Act) appears to have required the purchase of U.S. iron and steel unless the total cost of the project they do not increase by 25 percent or more.

China also has a developed strategy of expanding its economic influence on the basis of which it also strengthens its political influence. One of the biggest is the "Belt and Road Initiative", with which it covered almost every point of the planet, trying to give an incentive, first of all, to preserve the growth of its economy, but then also to influence the global economy. system in such a way that it better meets the needs of the Chinese economy. .

Serbia, which already has objections with China regarding the implementation of projects worth more than seven billion euros, is part of the "Belt and Road" initiative, according to unofficial information. This is one of the reasons why some domestic economists are already warning that Serbia could suffer the fate of certain African countries whose banks lend to large infrastructure projects that Chinese companies are working on, it was said at the meeting. The online debate on American politics and the economy is part of the project "American - a small stimulus for awakening" which the Center for Social Dialogue and Regional Initiatives is implementing with the support of the American Embassy in Serbia.

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